CITI: We Think Both Greece And Cyprus Will Exit The Euro
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Major debt restructuring for both Cyprus and Greece will probably force the struggling euro zone countries to leave the single currency, according to Citigroup's latest economic outlook, which warned markets could again be hit by escalating fears.
Stocks on both sides of the Atlantic have remained relatively sanguine in March as the so-called Troika (the European Commission, the European Central Bank and the International Monetary Fund) agreed to give Cyprus a 10 billion euro ($13 billion) bailout. The country also imposed credit controls and a levy on large deposits.
But the story is far from over, according to Citi, with the euro area's economic prospects remaining far from healthy.
"We continue to assume that Greece and Cyprus will leave EMU (European Monetary Union) over time," Citi said in the note published late Wednesday.
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